HOW THE FRENCHMAN DOES BUSINESS

Otago Witness, Issue 3030, 10 April 1912, Page 83

HOW THE FRENCHMAN DOES BUSINESS

THE .WAYS OF PARIS. By James H. Collins, in Chambers’s Journal. In Paris it is often difficult for the stranger to find the firm he is looking for. He has the street number, to be sure; but that proves to designate merely the entrance to a large courtyard. The door is big enough for auto-mobiles to go in, and horse cabs, which take away boxes and crates of bonnets, and even machinery, by the only quick delivery service that Paris seems to know in this line. The stranger walks into this court. Atone side he secs an ornamental fountain, formerly a pump ever the well from which tenants got water. Even now, though connected with the Paris mains, it may bo the sole supply for the unpiped flate and offices. Various kinds of work are going on in this courtyard. Knives and scissors are being ground; goods are being packed. Now covers are being put on mattresses in sight of the owners, so that there may he no trickery with the valuable wool filling. There are many doors and alleys, with few signs or name-plates. Through a door the stranger sees a lift. He walks in. Nobody in sight. But there is a button. He pushes it, thinking the concierge will answer. The empty lift starts upward all by itself—it is automatic. He sees another button labelled “Descente,” and pushes that. But the lift still rises grimly. He concludes that he had better get out of the place before the thing goes through the roof, and he slinks into the courtyard again, hoping that nobody has seen him. Then, probably, the concierge or his wife comes out of a dark lodge and helps him find the firm he wants. Not always, though, for sometimes even the concierge is at a loss. The Paris business man, when finally located, is found doing business amongvelvet upholster}', lace curtains, and other feminine fittings not known in our business establishments. But he is kindly and accessible. The French scheme of business demands considerable study and experience before the stranger is at home in it. An Englishman or an American is somewhat at a loss for a time in a land where cheques are seldom used, and large sums in cash must always be kept in the office safe, with, perhaps, 10.000 or 20,000 dollars in bonds as securities for more cash in an emergency. When goods are sold to the trade in France a bill is sent at the end of the month. Instead of the customer paying by cheque, however, the selle-’ waits until the following month, to give him time to correct any errors, and then draws upon him through his bank. * A very large proportion of the banking business of France is done through a few large financial institutions having branches in every important centre. The manufacturer in Paris has sold goods to the merchant in Lyons, for- example. He maks out a draft for the amount, sends it to his own bank in Par's, and the bank forwards it to Lyons. There a collector brings the draft to the merchant, and is paid in cash, which is then transferred and credited to the manufacturer in Paris. In many cases, though, the Lyons man keeps his funds in the local branch of the Paris man’s bank, in which even he merely accepts the draft and the hank transfers the cash. Much of the business of the country is thus cleared Inside the banking organisations. Yet large sums in cash are also passing from hand to hand all the time. Around the first of each month millions of francs are drawn from the hanks to pay bills.

said are returned in a few days. The landlord and small tradesmen want cash and distrust a cheque. Cheques are little used. The banks make heavier charges for collecting them than they do for drafts, and assume no responsibility for paying the money to trie proper person, so that cheques do not give the security we associate with them. No identification is asked for, nor can cheques be crossed on our system. A oheque will be paid by the bank to whoever presents it; and French banks keep the cancelled cheques when paid, so that they do not come back to the depositor as receipts. Where longer credit is given the buyer of goods, or where the seller needs cash immediately, a bill of exchange is drawn for the amount of the purchase, signed by both parties, endorsed by a third business to make it "three-name paper," and then sold to a bank. The seller of the goods pays the discount, which is probably smaller in France than in any other country.

French caution is satisfied with a low rate of interest on extremely safe securities. Many people are glad to leave money with the banks on time deposit for as little as 1 per cent. So the French banks always have vast sums of cheap money with which to buy good commercial paper. Perhaps the most interesting form of commercial paper in France is the kind that is too small to get into the banks at all. The small merchant in the provinces buys a modest order of goods and wants three montlis' credit. The wholesale merchant from whom he purchases cannot tie up capital that long. But the goods are sent, and the country merchant makes out a bill of exchange' for the amount, which is virtually a promise to pay three months from date. He signs it, the wholesaler signs it, and then a third signature is secured as further assurance —a thing easy to get in a country where everybody is used to doing business in this way. Then, Instead of taking the bill to the bank, the wholesaler puts it in his cash box and treats it as so much money. These "little bills" are in sums so small that the banks would not discount thehn — they are often drawn for as little as £l. By-and-bye the wholesaler, in turn, wants goods from a manufacturer. He purchases, arid sends suficient of these little bills to meet the cost. The wholesaler adds his signature to each bill, thus binding himself in turn to pay the amounts if the three names on each should prove worthless, and deposits them in his bank, to bo collected when the dates fall due. Then the bank sends them to the original makers, who liquidate them in cash. If the maker of a bill cannot take it up he is declared bankrupt, and the wholesaler is responsible. If the latter has become bankrupt, too, the third signer pays. If he were also bankrupt the manufacturer would pay, and fro on. These little bills often pass from hand to hanl many times during their three months' existence, gathering a new signature every time they are handed to a new person in payment for goods. When their backs are not large enough for all the signatures more are added on a piece of paper pasted to the margin. . Each new signature means just so much security. The losses are very small indeed Before anybody could conceivably lose through a little bill bearing half a dozen signatures it must necessarily follow that half the mercantile trade of France had been thrown into bankruptcy by some great oatastrophe. The excellent credit system of trench commerce is also behind this bill machinery. Everv business concern is kept (rack of by the* banks or merchants, who keep a dossier, or portfolio of data, relating to its commercial history Each time it has refused payment of a bill, even for a technical cause, or done anything in any way reflecting on sound credit, the record goes into its dossier to turn up 20 or 30 years later if wanted. When a business man's standing is such that his bills of exchange will be discounted by one of the big banks he is extremely 'solicitous about what may go down in'his dossier; for he_ knows that in a matter of the slightest irregularity he will hear from the bank, not within a few days or hours, but within a few minutes. So' France has been truly described as a country where the sheer goodwill Of a business is seldom worth anything when one comes to sell out, and yet at the same time a land where there is the most liberal margin in which to do business on credit. Long credit goes hand in hand with the French cash payment system to such an extent that too prompt settlement of a bill may cause alarm. An Englishman called in a Paris doctor for one visit. As treatment went no further than a single prescription, he eent the usual fee by messenger next morning. "The doctor was not at home. His wife did not want to accept the money. The messenger left it. Two hours later the doctor hurried in to ask what was wrong. This nrompt payment was so irregular that he feared there was some dissatisfaction with his services. The general scheme of French finance is amusingly illustrated in the restaurant waiter. The French waiter is a veritable cornerstone of the national life. He has his regular customers, and calls them "clients." They sit in the same places at the same hour every day: and if a stranger takes one of the seats sacred to a client, he is promptly moved down to some obscure corner of the restaurant. The strange customer has so little standing in Paris restaurants that he is often neglected until he shows that he is to be a fixture. When its regular clients get old enough to die off a restaurant often goes out of business. The waiter knows when the client's digestion is good and when it is bad, and he knows how things are running at home or in the office. He can tell him which dishes are well cooked to-day and condemn those that are not by a French shrug that says everything. He is the Hent'a friend and confidant, and when

funds are low he will extend him credit for a week or a month paying the bill out of his own pocket each day and accepting a double tip for interest when the client is in funds again. Because cheques are little used the bill collector is another important figure in France. Occasionally one of these men is lured into a lonely flat and murdered fo* the large sum lie is carrying around, Such a murderer was recently guillotined at Lille; and when efforts were made to secure a reprieve after his sentence, the united bill collectors of the town threatened a demonstration against the authorities. An Englishwoman, new to French ways, had an amusing controversy with a bill collector. She had bought garments to the value of £2O from a large Paris j store, but had sent them back for minor alterations. When they came home again they were brought by the bill collector, who stated tbat there was a charge of some three shillings for the alterations. The woman, not accustomed to the French system of petty charges, retained ! the goods and refused to pay. The collector entreated. She walked away from the door. He followed. She shut herj self in the bathroom. He hammered at the door and begged her to pay. He argued that he had no authority to adjust the matter ; but that she could submit it to the store. She, however, held the fort like a woman, and finally the collector went to her kitchen, took the largest saucepan there, and bore it triumphantly away as security. It was his | business to collect. j French commercial laws are full of petty detail, chiefly because thra laws are very strict. The tradesman must keep strict account of all purchases, sales, and ex» I tensions of credit. Even the large stores enter small sales items with an exactness unknown in other countries. Books must , bo kept without blanks, erasures, or marI ginal additions, and signed once each year by a special commercial judge. j When a merchant marries he must publish his marriage contract, so that those who sell him goods may know just what I his wife's interests are and how far her i dowry is involved in the business. All | letters must be filed and all records -re- ' served for 10 years. These precautions ■ protect creditors in case of bankruotcy, I but they involve an enormous amount of small detail. | A Birmingham company leased offices |in Paris. Some alterations were neces- | sary. An architect drew up a plan and a builder estimated that the work could |be done for £IOO. Ho was given the i job. When the work was completed ho I brought in a long bill, the total of which ; woe more than £2OO. Practically every | screw was charged for separately. The manager spread it out before the architect. j "Is that the way Frenchmen do business?'' he asked hotly. "\vhat sort of deal do you call that —asking one price ' and charging twice as much?" "Oh, monsieur does not comprehend," said the architect, "It is not intended that you pay this bill—no, no! lam I to go over it and determine the proper charge." i He did so, cutting down each item. j When he had finished the total was just I about what the builder had originally j estimated, and the latter was thoroughly I satisfied. It is said that the work of auditing the minutely-detailed bills for some of the public buildings in France 1 often takes years. J The Frenchman loves to bargain. ' Prices in the shops probably include a percentage that will allow of a reduction if the customer urges it, as most French, j people do, and in wholesale business and manufacturing bargaining is universal. j An Englishman who has had long experience in Paris, however, says that I French people bargain pretty much according to the persons they are dealing I with, and that if one chooses to establish an absolutely fixed price, cutting out the i delays and waste of bargaining, it is easy j enough to do so, even in France. j When he first began doing busiess in . France the chief difficulty was to persuade i the people that he was in earnest—au j serieux, as the French phrase it. The English, like the Americans, are regarded j there as spendthrifts. Just as the | tourist from this country, visiting the alli night cafes of Montmartre, comes home i confirmed in the belief that the French people are without industry or morals. jso the Frenchman, seeing the tourist I spending his money with a free hand in such resorts, thinks of him as a barnum, a slang noun that has become fixed in the French language, and is synonymous with I "boomer" or "bluffer." By scrupulous care to make no promises i that he did not fulfil, and by purposely j underrating his goods so that they always turned out even better than he ha-d said they would, this Englishman soon

got the Frenchmen's confidence. But after the latter had bought a lot of goods and found them satisfactory, and wanted some more, he was certain to come back with complaints. ■**• " I am greatly disappointed," lie would begin. " Your goods attract, they interest, they persuade the careless. But only for a time. My customers buy—yes. But later they regret. Your goods are showy —clever —very. But, my friend, they do not last!" This little line of argument is the French brother's standard attack when he wants a reduction or bonus on his next purchase. The French way of meeting it is heatedlv to defend your goods, insist that they are without parallel, and so forth. The Britisher, however, never took the French line of defence. Instead he laughed at the objections, admitted that everybody said his goods were made of the cheapest stuff that could be bought, declared that the Frenchman's customers were quite right, wonderfully wise people, that the Frenchman himself was a man of discernment. After thoroughly chaffing the customer, he added : " But if you have any of that last lot in your shop, and are not satisfied, send the* goods back. We will let you select new <mods to the same value It you want your monev instead, we 11 give you that " If any of your customers complain of our goods, give them their money back and send the stuff here. Well redeem it. That's where we stand. Without exception, when met with this unusual counter argument, the French customer would order more stock at the old price, and within a year all the people who did business with that concern had stopped bargaining. They knew that what was said to one was said to all, and that bargaining was unnecessary.